A recent article from the NY Times reported that undercapitalization or the lack of cash is one of the main reasons that most small businesses fail in the first five (5) years so financing should be one of the main considerations the entrepreneur needs to address when entering the business world.
The report makes a depressing statement but you shouldn’t allow that deter you from starting your business if that is what you truly want to do.
One of the companies that we work with has recently been able to obtain a total of over three hundred thousand dollars by hustling and not getting discouraged. Yeah; even in this economy they were able to procure financing!
What are their secrets?
A good business plan and sound business practices are two of the things that have been essential in obtaining their financing. Using a good plan and sound business practices can catapult your business into the big league!
Please understand that my statement is not all hype and don’t think that they were able to waltz into one bank and get an approval for the financing they were trying to obtain. The truth is they made many visits to a lot of banks and received countless rejections.
The fact remains that banks are not gambling institutions and they will not gamble on a shaky business. You just need to convince them that you are not shaky and your business has a good future.
Bank financing for businesses has not completely disappeared! You can find and obtain financing if you are willing to persevere, have good business practices and are willing to deal with the necessary paperwork.
The first and most important step is to develop a good business plan. Don’t worry; there are many resources that are available to help in developing a sound business plan!
You should start by researching the information available at the Small Business Administration. They are a great resource for all businesses and you should use the information they offer.
They even have an online outline that you can follow to develop your plan. I believe that it takes about fifteen to twenty minutes to complete. You should take whatever time is necessary to get your plan established. The dividends are well worth whatever time it takes!
I recommend that you take the business planning process very seriously. The business plan is one of the most important assets you can have for your business. It gives you a blue-print that you can use to focus your efforts to achieve your goals and make your company successful.
The thing to remember when you establish your business plan is that you need to make it flexible. Times will change and opportunities will become available so you should make a date with yourself or your partners to periodically review and update your plan.
I hope this may have given you some food for thought and will help if you are trying to get some financial help with your business. There are sources that are available that can help you.
Plan your work and work your plan!